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AdWords Click-Through Rate: Get More Traffic at a Lower Cost Per Click

Although there are many metrics that PPC advertisers should bear in mind, AdWords click-through rate (CTR) is arguably the most important. Click-through rate can have a significant impact on several aspects of a Google AdWords account, from higher Quality Score to lower cost per click and minimum bid.

What is AdWords Click-Through Rate?

As its name implies, AdWords click-through rate is the rate at which users “click through” to your site from an AdWords ad. The rate itself is calculated by determining the ratio between the number of impressions for a particular ad and how many times the ad has been clicked.

For example, a click-through rate of 1% means that for every 100 impressions the ad receives, one user clicked on it.

What is the Average Click-Through Rate in AdWords?

The search network refers to Google’s ad platform that primarily serves text-based ads. These are the advertisements you typically see above and to the right of organic results on search engine results pages.

The display network, on the other hand, typically serves users image-based ads, such as banners. It is important to understand the differences between the two networks because click-through rates vary widely from one network to the other.

According to Google, the average click-through rate of ads on the search network is 2%. This means that, for every 100 impressions of that ad, two users clicked on it. This benchmark means that any ad with a CTR higher than 2% can be considered above-average. Ads on the display network, however, typically have much lower click-through rate (around .1%), because these advertisements are primarily designed to increase brand awareness, rather than drive traffic.

Does Average Click-Through Rate in AdWords Vary by Industry?

Many advertisers are preoccupied with whether or not there are variations in average click-through rate in AdWords across various sectors. However, the more important benchmark is how their ads perform in relation to their competitors. One way to determine this is by assessing the strength of your account for free using WordStream’s AdWords Performance Grader.

After running an audit of your account, the AdWords Performance Grader allows you to see at-a-glance how your ads are performing relative to similar businesses in your industry.

In the figure above, which was taken from an AdWords Performance Grader report, you will notice that data for the top 200 keywords in this account are plotted on the graph in green circles. You can use this chart to analyze impression and click data for each individual keyword by hovering over each circle, as well as how these keywords are performing in relation to the typical CTR curve in your industry, represented by the yellow line.

These figures are compiled from WordStream’s internal data from grading more than $10 billion in AdWords advertising spend, providing you with unparalleled insight into how your ads are performing against your competitors.

Recommendations for Improving Click-Through Rate in AdWords

The AdWords Performance Grader doesn’t just tell you how your ads are performing according to industry averages; it also provides you with personalized recommendations on how to improve your ad CTR based on parameters unique to your AdWords account. In addition, the AdWords Performance Grader offers actionable suggestions on how to improve other metrics in your account, such as negative keyword use, targeting options, and ad copy.

As well as these recommendations, the free AdWords Performance Grader will display the estimated impact that making these changes will have on your account. This data can tell you which suggestions will have the greatest effect on your total ad spend and potential ROI.

Average click-through rate is one of the most crucial metrics in any PPC account. Increasing your CTR is one of the most effective ways to improve your Quality Scores, reduce your CPC and minimum bid, and drive more qualified traffic to your website. Grade your account for free with WordStream’s AdWords Performance Grader and start improving your AdWords CTR today.

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